Satya Vidya Real Estate Private Limited V. Assistant Commissioner of Income Tax, Central Circle, Bilaspur

WPT/86/2022

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M/s Satya Vidya Real Estate Private Limited, through its director, filed a writ petition against the Assistant Commissioner of Income Tax, challenging a notice issued under Section 153C of the Income Tax Act, 1961, and an assessment order. The petitioner argued that there was a procedural irregularity as the satisfaction recorded by the Assessing Officer, who searched a third person, was not provided to them despite requests. The respondent countered that the matter should be addressed through an appeal under Section 246A, as the assessment order had already been passed. The court agreed with the respondent, emphasizing the availability of an alternative remedy through the appellate process.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 680030 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 30-03-2022
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax-III v. Calcutta Knitwears, Ludhiana, Super Malls Private Limited v. Principal Commissioner of Income Tax, 8, New Delhi, Income Tax Officer-1 and 4 others v. Smt. Kamala Ojha
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: AJAY KUMRANI
• Assessee Lawyers: ANKIT SINGHAL
• Keywords: Assessment Order; Income Tax; Notice; Procedural irregularity; Satisfaction Record
• Section: 153C; 246A

Judgement Text

"1 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 86 of 2022 M/s Satya Vidya Real Estate Private Limited, A Company duly registered under the provisions of the Companies Act, 1956, Having its registered office at, Hatari Bazar Road, Sakti- 495689, Chhattisgarh, Through its Director Arun Kumar Agrawal. ---- Petitioner Versus Assistant Commissioner of Income Tax, Central Circle, Bilaspur, Income Tax Department, Having its office at, Aayakar Bhawan, Vyapar Vihar, Bilaspur, District Bilaspur 495001, Chhattisgarh. ---- Respondent For Petitioner : Mr. Ankit Singhal, Advocate For Respondent : Mr. Ajay Kumrani, Advocate on behalf of Mr. Amit Choudhary, Advocate Hon'ble Shri Justice Parth Prateem Sahu Order o n Board 30.03.2022 1. This Petitioner aggrieved by issuance of notice under Section 153C of the Income Tax Act, 1961 (in short ‘Act of 1961’) by the respondent authority has filed this petition seeking following relief :- 10.1 That, this Hon’ble Court may kindly be pleased to pass any appropriate writ, order or direction to direct the Respondent Authority to produce the complete records of the case for its kind perusal. 2 10.2 That, this Hon’ble Court may kindly be pleased to pass any appropriated writ, order or direction to quash and set aside the impugned notice dated 15.07.2021 issued by Respondent under Section 153C of the IT Act and declare the same as illegal and void; 10.3 That, this Hon’ble Court may kindly be pleased to pass any appropriated writ, order or direction to quash and set aside the impugned order dated 10.03.2022 passed by Respondent. 10.4 Any other relief or relief(s) which this Hon’ble Court may deem fit and proper in view of the facts and circumstances of the case, may also kindly be granted.” 2. Mr. Ankit Singhal, learned counsel for petitioner would submit that immediately after service of notice under Section 153C of Act of 1961, he submitted an application before the Assessing Officer to provide satisfaction recorded by Assessing Officer who searched the third person and forwarded him the material for issuance of notice under Section 153C of Act of 1961. He contended that under the provisions of Section 153C of Act of 1961, it is mandatory upon Assessing Officer searching the third person to record satisfaction that any money, bullion, jewellery or other valuable article or thing seized or requisitioned, belongs to any books of account or documents, seized or requisitioned, pertains to any information contained therein, relates to a person other than the person, who was 3 searched. Petitioner is the person other than person searched and therefore, Assessing Officer is required to supply satisfaction recorded by other Assessing Officer who searched third person, which was not provided to him even after demand made by him prior to submitting an application, as such, there is procedural irregularity in issuance of notice. During pendency of this writ petition before this Court now, respondent Authority has passed assessment order on 22.03.2022. As there is procedural irregularity in non-supplying of satisfaction recorded by Assessing Officer who searched other person, this Court can entertain this writ petition even though petitioner is having an alternative remedy of filing an appeal before Appellate Authority. He places reliance upon the judgment passed by Hon’ble Supreme Court in case of Commissioner of Income Tax-III v. Calcutta Knitwears, Ludhiana reported in (2014) 6 SCC 444 and Super Malls Private Limited v. Principal Commissioner of Income Tax, 8, New Delhi reported in (2020) 4 SCC 581. 3. Per contra, Mr. Ajay Kumrani, learned counsel for the respondent would submit that as assessment order under the Act of 1961 has already been passed, petitioner is required to challenge the order by way of filing an appeal under Section 246A of the Act of 1961. Petitioner raised factual dispute of not recording of satisfaction by Assessing Officer who searched third person, which can very well be considered and decided by Appellate Authority based on the relevant records. He contended that in case of Income Tax Officer-1 and 4 others v. Smt. Kamala Ojha decided on 25.06.2019 in Writ Appeal No.293 of 2017, the Court while considering order passed in writ petition challenging notice under Section 148 of the Act of 1961 has held that if during pendency of the writ petition challenging notice under Section 148, assessment order is passed, then Assessee is required to file an appeal under Section 246A of the Act of 1961. He also submits that order passed by Division Bench in case of Kamala Ojha (supra) was challenged by Assessee before Hon’ble Supreme Court. Referring Annexure R/1, it is submitted that Special Leave Petition filed by Assessee was dismissed granting liberty to Assessee to file an appeal challenging order of assessment. 4. I have heard learned counsel for the parties. 5. The grievance of petitioner is that jurisdictional Assessing Officer issued notice under Section 153C of the Act of 1961 based on the information received by him from other Assessing Officer, who searched other person. After receipt of notice, when petitioner submitted an application for supply of satisfaction recorded by the other Assessing Officer who searched third person, jurisdictional Assessing Officer has forwarded reason / satisfaction recorded by him before issuing notice under Section 153C of the Act of 1961, but grievance of petitioner is that jurisdictional Assessing Officer has not supplied him satisfaction recorded by Assessing Officer, who searched third person. 5 6. When this Court put pin-pointed question to learned counsel for the petitioner that under which provision, satisfaction recorded by Assessing Officer who searched third person is to be supplied to Assessee, he submits that under the scheme of Act, Assessee is required to know the basis and reasons, on which, notice has been issued. Undisputedly, when Assessee has submitted an application before Assessing Officer, he supplied reasons recorded by him before issaunce of notice under Section 153C of Act of 1961. 7. At this stage, Mr. Singhal would submit that as per his information, Assessing Officer who searched third person has not recorded the satisfaction. 8. In view of above, in the opinion of this Court, this appears to be a factual dispute raised by learned counsel for petitioner, which can be very well considered and decided by Appellate Authority. 9. The case laws, on which, counsel for petitioner placed reliance are arising of order passed by Appellate Authority in an appeal challenging order of assessment, hence, in view of facts and circumstances of the case, I am not inclined to entertain this writ petition, particularly when during pendency of this petition, assessment order is already passed by Authority as the petitioner is having efficacious alternate statutory remedy of filing appeal under Section 246A of the Act. The petitioner will be at liberty to approach the Appellate Authority as per provided under the Act of 1961, raising all the grounds available to him. Appellate Authority, in turn, will 6 consider and decide all the grounds raised by appellant in an appeal to be filed challenging order of assessment strictly in accordance with law. 10. The writ petition is, accordingly, dismissed. Sd/- (Parth Prateem Sahu) Judge Yogesh "